European markets close higher, buoyed by China's stimulus measures

LONDON — European stocks closed higher Tuesday, buoyed by China's central bank monetary stimulus measures.

The pan-European Stoxx 600 index provisionally ended up 0.6%, with most sectors and major bourses in positive territory. Mining stocks led the gains, up around 4.5%, as China's stimulus measures provided a boost for commodities.

The positive sentiment comes after Asia-Pacific markets climbed overnight following Beijing's announcement of a range of policy easing measures in a bid to stimulate the economy.

In a rare briefing, Pan Gongsheng, governor of the People's Bank of China, said the central bank will cut the reserve requirement ratio for banks by 50 basis points, although it did not provide a specific timeline.

The PBOC also announced it would cut the seven-day reverse repurchase rate from 1.7% to 1.5%, among other measures.

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Stocks exposed to the Chinese market and consumers popped on Tuesday with miner Antofagasta the top performer on the Stoxx 600. Shares of Antofagasta rose 7%, while other miners Anglo-American, Glencore and Rio Tinto all jumped more than 4%.

Auto stocks were among the top performers too, with BMW up 3.7%, Valeo up 2.3% and Volkswagen nearly 2% higher, respectively.

Market participants were also keeping an eye on shares of Commerzbank Tuesday after the stock fell around 5.7% during the previous session. Shares of Commerzbank provisionally ended 2.2% higher.

UniCredit announced Monday it had increased its stake in the German lender to around 21% and submitted a request to boost that holding to up to 29.9%, signaling a takeover bid might be in the cards. Earlier this month, the Italian bank took a 9% stake in Commerzbank, confirming that half of this shareholding was acquired from the German government.

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U.S. stocks pulled back from record levels on Tuesday after a weaker-than-expected consumer confidence reading.

The Conference Board's Consumer Confidence Index slid to 98.7 in September, down from 105.6 in August, the biggest one-month decline since August 2021. The Dow Jones consensus forecast was for a reading of 104.

The gains were modest but appeared to be a continuation of last week's rally after the U.S. Federal Reserve cut interest rates by half a percentage point. The fed funds rate now sits at a range of 4.75% to 5.00%